2013

R6 Business ParkINVESTMENT MEMORANDUM

DEVELOPMENT OPPORTUNITY WARSAW - POLAND

R6 Business Park

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The Offer

• VB Real Estate has engaged Jones Lang LaSalle to market their Property located in one of the most prominent parts of Żoliborz in Warsaw, on Rydygiera Street.

Highlights

• The Property offered for sale comprises plots 1/1, 1/6, 1/7, 13 and 14 with the total area of 7,293 m2.

• The seller holds a 56 year perpetual usufruct title to majority of the land (expiring on 2nd October 2068) and 83 year perpetual usufruct title to rest of land (expiring on 1st may 2095).

• The office project (R6 Business Park) to be developed on the Property has recieved LEED Gold precertificate in November 2012.

• The Property has valid development conditions from June 2009 for an office building and valid building permit form February 2013.

Key Investment Considerations

• Prime Location - The Property is conveniently located in Żoliborz district with very good public and car access in close vicinity to the largest shopping mall in Warsaw – Arkadia.

• Convenient Access - The Property can be very easily accessed by numerous means of public transportation with public bus and tram lines running along Jana Pawła Avenue providing access to all other districts in Warsaw. Approximately 10 minutes walking distance from the Property metro and train station can be found.

• Visible Location - The Property enjoys unobstructed visibility from Jana Pawła Avenue the main arterial route in Warsaw.

• Extensive Amenities - Due to neighboring Arkadia mall, potential tenants shall enjoy closeness of food courts, cafeterias, post office, banks, food stores and various shops.

• Pad Ready Development - Substantial pre-development works have been conducted on the Property including demolition of former buildings creating convenient start conditions for future construction works.

• Development conditions - The entire Site has development conditions which enable construction of the office building having approximately 24 000 GLA.

• Building Permit - The owners have received valid building permit on the 18th of February 2013.

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Location and Access

The subject Property is located at the edge of Warsaw’s city centre on the western side of the Vistula River in Żoliborz district. Żoliborz is situated directly to the north of the city centre and constitutes one of Warsaw’s 18 districts. With approximately 50,000 inhabitants it is one of the smallest districts within the city however, extremely popular with more affluent residents of Warsaw.

The Property is located next to one of main road arteries Jana Pawla Avenue, linking route between Żoliborz district with the central part of Warsaw.

The location offers excellent street frontage which will further improve, as the construction plan and conditions set out in WZiZT envision ground floor access to the building at the same level as Jana Pawła Avenue.]The Property benefits from excellent public transportation links along Jana Pawła Avenue providing convenient connections with other parts of the city (Śródmieście, Wola, Bemowo). It is served by six tram lines (17, 22, 27, 28, 33, 35) running along Jana Pawła Avenue as well as two bus lines (205, 510) having their stops a walking distance from the subject Property.

Moreover, metro station is also nearby. It is located next to railway station, Dworzec Gdański, providing fast and easy access for all the commuters travelling from suburban districts of Warsaw.

The Property is also very well located in terms of close amenities. A walking distance from the Property, Arkadia Shopping Mall is found, offering to future tenants, food courts, cafes, shops, food stores, bank dispensers etc.

The closest neighbourhood is also undergoing fast development especially in terms of construction of new residential buildings with few office investments among them. This brings along road infrastructure improvements together with utilities.

The direct access to the Property is possible via Rydygiera Street which is directly connected to the north of the Property with Broniewskiego via Matysiakówny Street. There are also stairs directly leading onto the flyover of Jana Pawła Avenue where bus and tram stops are found.

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R6 Business Park

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Property

The Property has irregular shape with a flat topography. It comprises of 5 plots 1/1, 1/6, 1/7, 13 and 14 situated within precinct no. 7-03-06 with the total area of 7,293 m2.

All buildings were demolished, debris removed and the Site is empty and ready for construction.

The Site has access to all utilities such as electricity, gas, city-supplied heating, water, sewage pipes and communication lines.

Perpetual Usufruct Fee

According to the last motion submitted by the City Authorities dated 1 April 2012 the total annual payment for the RPU right amounts to PLN 780,840 for plots 1/1, 1/6, 1/7, 13 and 14.

Tenure

Tenure summary

Perpetual Book No.

Plot no. Area (m2) Owner Holder of Perpetual Usufruct

Perpetual Usufruct Term

WA1M/00162179/2 1/1 266 State Treasury R 6 Offices Sp. z o.o. 2095/01/05

WA1M/00035421/5 1/6, 1/7,13

6,472 State Treasury R 6 Offices Sp. z o.o. 2068/10/02

WA1M/00200853/0 14 555 State Treasury R 6 Offices Sp. z o.o 2068/10/02Source: Copies of the electronic extracts from Perpetual Book No. WA1M/00035421/5 and WA1M/00200853/0 as of 20.11.2012.

According to land and mortgage books WA1M/00162179/2, WA1M/00035421/5 and WA1M/00200853/0, in chapter III appropriated for encumbrances, as well as, in Chapter IV appropriated for mortgages, there are no entries.

Perpetual usufruct is a fully transferable property right typically granted for a period of between 40 and 99 years. Under the Civil Code, the usufruct holder may apply for a right to renew within the last five years of the term, for a further period ranging from 40 to 99 years.

The granting authority, typically the state treasury or local authority, can only refuse a request for an extension on the grounds of important public interest. Should the granting authority refuse to extend the use right, the tenant is entitled to compensation for any buildings on the land.

Al. Jana P

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SURVEYS

EnvironmentalAccording to the decision 834/OŚ/2012 there is no need to carry out environmental report.

Hydrological Hydrological appraisal has been carried out in October 2011. The Property lies between 20.15 – 20.90 m higher then ‘0’ level of Vistula River. At the level of 4.40 – 4.50 m table water has been found.

GeologicalGeological examinations has been carried out in October 2011. The appraisal of geological conditions are favourable towards potential development.

Planning and Project

There is currently no Master Development Plan for subject area in place. Local Authorities confirm it is “under preparation”. The owners were granted in July 2009 with development conditions (WZ) which have been amended on the 27th of July 2012 allowing for the construction of an office building. On the 18th of February 2013 they have also received building permit (PnB).

According to granted WZ a project followed which envisages construction of office building having total Gross Leasable Area (GLA) of 23,997 m2. The GLA is calculated based on BOMA ANSI Z65.1-2010. The building would comprise of 7 floors in the northern part of the Property whilst there would be a southern dominant having 10 floors. There are also 2 underground floors envisaged for underground parking. Due to level differance between Jana Pawla Avenue and Rydygiera Street there are additional 2 underground floors from Eastern side which would be used as a parking and storage place having GLA of 1,956 m2. The project also envisioned surface parking in the eastern part of the Property, along Jana Pawla Avenue having altogether 201 parking places. It is also planned that ground floor access to the building will be at the same level as Jana Pawła Avenue improving on-foot access as well as visibility of whole project.

Gross Leasable Area – Office 23,997 m2

Gross Leasable Area – Storage 1,956 m2

Parking places 201 units

R6 Business Park

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The table below presents building possibilites in accordance to the building devel-opment conditions:

Floor Level GLA (m²) Storage (m²) Parking-2 338.62 549.05 86-1 645.75 412.10 710 1,614.27 120.70 441 2,296.31 873.82 -2 2,959.46 - -3 2,887.40 - -4 2,959.08 - -5 2,959.01 - -6 2,666.67 - -7 2,048.86 - -8 1,917.21 - -9 687.29 - -10 17.52 - -Totals 23,997.45 1,955.67 201

The project of an office building has been designed and GLA has been calculated based on BOMA ANSI Z65.1-2010.

The R6 Business Park Project shall have following specifications:

• Raised floor• Suspended ceilings• Clear height 3 meters for office area• Floor plates on levels 1 - 8 ranging from 2,300 – 3, 000 m²• Depth of office space (window – wall) is 6.90 meters• Open space design – possibility to subdivide• 8 high speed passenger lifts• 4 independent staircases• 4 Kitchenettes cores on each floor• 4 Toilet cores on each floor• Fire hydrants and jet fan system• Access control to main office entrances• Building Management System (BMS)

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Technical SpecificationSuspended ceiling

Access control system

Facade in moduls

Floor boxes system

Carpeting in tiles

Raised floor

Fire-suppression system (smoke detectors, sound

alarm system)

500 LUX lightening

3 meters height

R6 Business Park

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R6 Business Park

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Office Market

Demand Occupier sentiment in Warsaw remains strong with more than 157,600 m2 (123,250 m2 net) leased in Q3 2012 and a total of 455,300 m2 so far this year. That is 15,000 m2 more than in the corresponding period of the record-breaking 2011. It is also worth noting that 41% (64,500 m2) of the entire registered take-up in Q3 constituted of pre-lets, while lease renewals only had a 22% share. The largest pre-lets in Q3 included a 12,600 m2 deal by Poczta Polska in Domaniewska 37c (Mokotów), GDDKiA taking 11,700 m2 in Green Corner (City Centre) developed by Skanska and Dalkia taking 5,900 m2 in Plac Unii (Mokotów). Q3 2012 also saw some lease renewals, including Generali (7,700 m2) in Marynarska Point (Mokotów).

SupplyMore than 148,100 m2 of office space was delivered in the first three quarters of 2012, with 56,100 m2 of that space coming in Q3 2012. The South-East office district saw two new office completions within Wilanów Office Park, including a building delivered for Asseco and the B3 office block, both totalling approximately 29,500 m2. The City Centre saw one new completion: Senator (23,250 m2) developed by Ghelamco. It is estimated that Q4 2012 will see up to 120,000 m2 of new deliveries, of which 41% is pre-leased. However, some developments may be rescheduled for January 2013. 2013 will register a very high volume of new office completions with more than 300,000 m2 expected to be delivered to the market. This substantial amount of new office space will have an impact on the vacancy rate.

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Graph 1: Gross Take-up (m²)

R6 Business Park

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VacancyAt the end of Q3 2012, approximately 8.1% of the modern office stock in Warsaw remained vacant (9.4% in the CBD, 8.2% in the City Centre Fringe and 7.8% in Non-Central locations). The vacancy rate is seeing an upward trend and, due to the large volume of office space in the pipeline, the market is expected to see further upward pressure on this ratio in Q4 2012 and especially in 2013. High pre-let activity does not have an immediate impact on the absorption of the office space; however, it may soften the increase of the vacancy rate over the next several months.

RentsPrime headline rents in Warsaw remained stable when compared to the end of 2011. Prime office space in Warsaw City Centre now fetches between €22 and €25 m2/month. Some triple A buildings quote higher rents.

The best Non-Central locations, such as prime buildings in Mokotów, are being leased at €15.00 to €15.50 m2/month.

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Occupied Stock

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Graph 2: Occupied Stock by Sub-Markets (m2) and Vacancy Rate (%) Graph 3: Prime Headline Rents (€/ m²/ month)

Contacts:

Jones Lang LaSalleul. Królewska 16

00-103 Warszawa

Tomasz PuchNational Director Head of Polish Office and Industrial Capital Markets

Mob: +48 602 323 990 e-mail: tomasz.puch@eu.jll.com

Mateusz Dembiński Land Acquisition Consultant Capital Markets Central Europe

Mob: +48 602 756 256e-mail: mateusz.dembinski@eu.jll.com